This thesis will focus on the experience of those developing countries whose FEZs have been regarded as successful in attracting foreign investment and creating a suitable environment for the activity of zone-based foreign enterprises. Furthermore, it will examine the major aspects of FEZ operations and legal and economic strategies of host countries. Chapter I will concentrate on issues relating to foreign investment, types of attitudes towards foreign investment and their relationship with investment policies of host countries and the role of legal systems in attracting foreign investment. Chapter II will provide an overview of various types and characteristics of FEZs, reasons for their proliferation and some historical background. Benefits and costs associated with the operation of FEZs will be analyzed in this Chapter as well. Chapter III will be devoted to the major components of the FEZ framework, international economic arrangements, e.g. tariff concessions granted by the industrialized powers, and the impact they have on foreign investor behavior. Chapter IV will examine incentives that are usually offered by FEZs, their consequences for host countries and value to foreign investors. This Chapter will also give a general overview of constraints existing in foreign investment policies of developing countries. The conclusion will recapitulate the preceding chapters of the thesis and will outline probable future developments with regard to FEZs in Ukraine.